Doing Channel Checks Into El Pollo Loco

Very good supply chain management….

Also, the 10-minute chart is offering up a nice base over base pattern. Watch it over $30.

_____________________________________________________

LOCO

 

An Abandoned Chart

sqBvwvz

You still do not hear the micro-caps getting too much play these days.

But the potential, major head and shoulders top certainly remains in play as the micro-cap index struggles below its 200-day moving average, yet again.

On top of the small caps, the micro caps are another flashing red sign in this market which seems to be ignored by many market players.

___________________________________________

IWC

All About That Small Cap Life

pictures_of_the_day_13

I am still focusing on the small (and micro) caps in this market as a reason for caution.

This morning’s action reinforces that idea, with the Russell 2000 daily chart bear flag breakdown from last week threatening to push lower yet.

More on this in a bit.

Elsewhere, some notable pockets of strength this morning can be seen in the dollar stores: FDO DG.

Split Times at Mr. Market’s High

The following is just a small excerpt from my latest Weekly Strategy Session (please click on that hyperlink for details about trying it out). which I published for members and 12631 subscribers this past Sunday. 

 With the S&P 500 Index closing the week out once again above its rising 20-day simple moving average (orange line on daily chart, below), bulls remain in control and one of the only reasons for caution on this specific chart would be the lingering issues we have previously covered regarding the long-term dynamics of the S&P: No 10% standard correction and no 200-day moving average test by price both since the year 2012.

Longer-term issues aside, the S&P is leaning down against the support trendline of the rising wedge pattern I have highlighted in light blue. Two weeks ago, bears made an initial attempt at breaking the S&P down, only to find themselves trapped in yet another round of resilient dip-buying.

Still, I suspect once the S&P more decisively loses its 20-day moving average, on a weekly closing basis, that the pent-up supply will be unleashed and a sharp move lower is likely to materialize. At least, that is the risk to current S&P setup for bulls.  

Nonetheless, the resilience of buyers in this bull run cannot be underestimated. On the one hand, this persistent dip-buying should see shorts standing aside until a better spot presents itself to get involved with any type of aggression as a bear. 

But on the other hand, as we noted as a key distinction to draw last weekend, just because the S&P is incredibly resilient does not mean longs are making money hand over fist as a general proposition, or anything close to it.

Specifically, the main concern for this market is the action in the Russell 2000 Index, typically a good litmus test for risk appetite, or lack thereof, due to he high beta, small market capitalization stocks with institutional sponsorship which are housed here. While we know the S&P is closing each week out above its 20-day moving average, the Russell continues to clearly diverge by continually testing its major 200-day moving average. 

First, the weekly timeframe illustrates the initial but sharp rejection of price down away from the Russell’s highs made earlier this year. A weekly close below 1,082 is still necessary in order to confirm any potential double-top pattern. But the weakness is noteworthy as a sign of a major index struggling even as the S&P continues to print new all-time highs. 

Next, the daily chart of the Russell illustrates…

Please click here to continue reading

Sunday Matinee at Chess Cinemas

the-bridge-on-the-river-kwai

With its unforgettable and timeless theme tune, The Bridge on the River Kwai (1957) is certainly worth a viewing. William Holden, Alec Guinness, and Jack Hawkins lead a spirited cast in this World War II epic.

via imdb:

After settling his differences with a Japanese PoW camp commander, a British colonel co-operates to oversee his men’s construction of a railway bridge for their captors – while oblivious to a plan by the Allies to destroy it.

Doing Channel Checks Into El Pollo Loco

Very good supply chain management….

Also, the 10-minute chart is offering up a nice base over base pattern. Watch it over $30.

_____________________________________________________

LOCO

 

An Abandoned Chart

sqBvwvz

You still do not hear the micro-caps getting too much play these days.

But the potential, major head and shoulders top certainly remains in play as the micro-cap index struggles below its 200-day moving average, yet again.

On top of the small caps, the micro caps are another flashing red sign in this market which seems to be ignored by many market players.

___________________________________________

IWC

All About That Small Cap Life

pictures_of_the_day_13

I am still focusing on the small (and micro) caps in this market as a reason for caution.

This morning’s action reinforces that idea, with the Russell 2000 daily chart bear flag breakdown from last week threatening to push lower yet.

More on this in a bit.

Elsewhere, some notable pockets of strength this morning can be seen in the dollar stores: FDO DG.

Split Times at Mr. Market’s High

The following is just a small excerpt from my latest Weekly Strategy Session (please click on that hyperlink for details about trying it out). which I published for members and 12631 subscribers this past Sunday. 

 With the S&P 500 Index closing the week out once again above its rising 20-day simple moving average (orange line on daily chart, below), bulls remain in control and one of the only reasons for caution on this specific chart would be the lingering issues we have previously covered regarding the long-term dynamics of the S&P: No 10% standard correction and no 200-day moving average test by price both since the year 2012.

Longer-term issues aside, the S&P is leaning down against the support trendline of the rising wedge pattern I have highlighted in light blue. Two weeks ago, bears made an initial attempt at breaking the S&P down, only to find themselves trapped in yet another round of resilient dip-buying.

Still, I suspect once the S&P more decisively loses its 20-day moving average, on a weekly closing basis, that the pent-up supply will be unleashed and a sharp move lower is likely to materialize. At least, that is the risk to current S&P setup for bulls.  

Nonetheless, the resilience of buyers in this bull run cannot be underestimated. On the one hand, this persistent dip-buying should see shorts standing aside until a better spot presents itself to get involved with any type of aggression as a bear. 

But on the other hand, as we noted as a key distinction to draw last weekend, just because the S&P is incredibly resilient does not mean longs are making money hand over fist as a general proposition, or anything close to it.

Specifically, the main concern for this market is the action in the Russell 2000 Index, typically a good litmus test for risk appetite, or lack thereof, due to he high beta, small market capitalization stocks with institutional sponsorship which are housed here. While we know the S&P is closing each week out above its 20-day moving average, the Russell continues to clearly diverge by continually testing its major 200-day moving average. 

First, the weekly timeframe illustrates the initial but sharp rejection of price down away from the Russell’s highs made earlier this year. A weekly close below 1,082 is still necessary in order to confirm any potential double-top pattern. But the weakness is noteworthy as a sign of a major index struggling even as the S&P continues to print new all-time highs. 

Next, the daily chart of the Russell illustrates…

Please click here to continue reading

Sunday Matinee at Chess Cinemas

the-bridge-on-the-river-kwai

With its unforgettable and timeless theme tune, The Bridge on the River Kwai (1957) is certainly worth a viewing. William Holden, Alec Guinness, and Jack Hawkins lead a spirited cast in this World War II epic.

via imdb:

After settling his differences with a Japanese PoW camp commander, a British colonel co-operates to oversee his men’s construction of a railway bridge for their captors – while oblivious to a plan by the Allies to destroy it.